Good Tax Guide says European countries can strengthen tax signals to buy ZE cars
Wed 23 April 2025
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Transport and Environment's 2025 'Good Tax Guide' says that governments of the EU’s largest car markets – apart from France – have low fiscal incentives for electric cars and instead steer buyers towards heavy petrol SUVs.
The Brussels-based NGO publishes the Good Tax Guide yearly. It analyses and compares the car taxation systems across Europe.
The UK comes low in the table in terms of tax incentives for private individuals to adopt EVs, well below France and a little behind Germany, but is close to the top (and above France) when it comes to company cars. Denmark and Norway have the largest tax incentives for EV uptake across most comparators.
The report says that company cars represent 60% of all new car registrations in the EU and that many countries could do more to encourage EV uptake in this sector. However, the UK is an exception in this regard and France has a large ‘tax gap’ – the difference in taxes that companies pay for a petrol car compared to an electric vehicle – in favour of EVs. The tax gap in Germany is three times lower.
T&E proposes that policymakers should:
• National level: Reform car fiscality by increasing taxes for petrol cars based on their CO2 emissions and weight;
• EU level: As part of its upcoming legislative initiative, Decarbonising Corporate Fleets, the European Commission should set binding EV targets for large companies.
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